Tokyo Electron and Applied Materials have announced their slated merger will not come about due to concerns of US antitrust regulators. The new company would have been gigantic rival for Europe's ASML.
Japanese chip company Tokyo Electron and its US rival Applied Materials agreed Monday to scrap their planned merger after competition regulators rejected the terms of the deal.
California-based Applied Materials said the $9.4-billion (8.67 billion-euro) merger was canceled as proposed tweaks to the deal did not win the approval of the US Department of Justice (DoJ).
"Based on the DoJ's position, Applied Materials and Tokyo Electron have determined that there is no realistic prospect for the completion of the merger," the US chip maker said in a statement.
Good news for ASML
The Americans added that they had authorized the repurchase of up to $3 billion of its stock to take place over the next three years. It also said neither company would pay any termination fees.
The two firms produce machinery required to prepare silicon wafers for imprinting with the circuits that turn them into processors.
A merger would have brought together the world's No. 1 and No. 3 semiconductor industry suppliers and would have formed a mighty rival for European competitor ASML.
The scrapped deal comes only three days after US regulators thwarted a $45-billion tie-up between US communications companies Comcast and Time Warner Cable.
hg/cjc (AFP, AP, Reuters)